What is your short-term objective and your long-term strategy? - The Noel D'Cunha Sunday Column
Industrial heavyweights which reigned supreme are no longer part of the elite Sensex index. It is the same in our industry.
Many firms wanting to strategise do so because there’s a problem that needs fixing. However, if this is the case it’s much better to fix the problem before creating a new strategy. Existing problems won’t go away and may just lead to issues that turn critical later on – especially if they involve conflict.
The Sunday Column asks, what is your outlook beyond the next five years?
19 May 2019 | 6850 Views | By Noel D'Cunha
Everything is flux: Lessons for print from the Sensex
A recent survey in a business daily said, "the Sensex was set up in 1986, though its base is 1979. The Reserve Bank of India constructed an index of traded securities in 1949, but Indian investors had to wait till 1986 for a credible daily gauge of market movements."
Tata and Birla power: Once upon a time there were six Tata companies in the index—ACC, Tata Power, Tata Steel, Tata Motors, Voltas and Indian Hotels; and five Birla Group companies —Century Textiles, Grasim, Indian Rayon, Hindalco and Hindustan Motors. Now there are many more families and groups.
Lesson for the print and packaging industry: The industry reflects the Sensex in terms of families. Talk to any, and you realise many firms shut down because every business needs to have a strategy plan, and some did not have one. Many company heads, usually the family head felt, while it may be a worthwhile document, it’s going to take up management time and resource, which could be better deployed elsewhere. To an extent, everyone involved in managing the business needs to buy into the process, or it’ll be wasted effort. The question is, do you have a driver and a strategic plan?
Exit Sensex: Industrial heavyweights like the Thapar group, the Walchand group and the Kirloskar group are no longer part of the elite index. Also, real estate and infra players like Jaiprakash Associates, Reliance Infrastructure and DLF have exited.
Lesson for the print and packaging industry: Many heavyweights in our industry have exited. We asked one of the former employees at the erstwhile Tata Press. He said, "Internal order is important." Quite true. Apart from those that want to develop or move in a different direction, some firms wanting to strategise do so because there’s a problem that needs fixing. However, if this is the case, it’s much better to fix the problem before creating a new strategy. Current problems won’t go away and may just lead to issues that turn critical later on – especially if they involve conflict.
From Textile to Finance: The first version of the Sensex was dominated by textile manufacturers. Post-1991, banking and telecom gained ascendancy. Today there are nine financiers like HDFC and Bajaj Finance; while manufacturing firms have halved from 26 in 1988 to 13.
Lesson for the print and packaging industry: Raising finance from the market has made it very easy for writers to cut and paste information from elsewhere into their strategy document. The problem here is, cash is unreliable. Plus the cost of cash is high. But there is a bigger problem. Even if the information is taken from a similar business, every business is different – there is no one size fits all. Following industry best practice is worthwhile, but that’s where the copying must stop. Therefore, be original.
MNCs in 1999: Colgate Palmolive, Nestle, GlaxoSmithKline Pharmaceuticals, Novartis, Hindustan Unilever, Castrol and ITC were the behemoths in 1999. Today Hindustan Unilever and ITC are the only two MNCs.
Lesson for the print and packaging industry: The thing is, all business needs to examine its position in the market against its strengths, weaknesses, opportunities, and threats. When is the last time you have done this? By yourself at your desk? Remember: every business has its own culture and methods of operating. There are countless examples of where business has swallowed another only to find culture clash has undone many of the gains made by the acquisition. And so it is with a strategy plan – planning shouldn’t undermine what is known to work, and it shouldn’t break an organisational structure. Nurture your own business
Manufacturing vs Service: The rise and rise of a new generation of Indian firms and a shift from manufacturing towards services.
Moral for the print and packaging industry: So what is your short-term objective, and what is your long-term strategy? This should be the details (and not rhetorics) that go beyond the medium time-frame and illustrates what the business needs to focus on to meet the goals that have been set. So what is your outlook beyond the next five years?
Mantras
Create a big plan: Create an overview that keeps track of project performance and business performance against the targets that have been set. The normal benchmark period is monthly. How good is your report card of the past 12 months?
Measure things: Financial assessment reports, using historical record and likely future positions to plan and predict the future of the business. The aim here is to assess and control business financial performance. Change needs to be measurable. When have you measured it last?
Data buzz: Any decision you make will be based on the information you have to hand. Use bad information and it’s guaranteed that you’ll end up making a bad decision. Don’t use assumptions – use only solid data which can be verified.
Competitive advantage: This relates to the unique selling point (USP) of the business – what makes it special so that customers want to buy from it rather than from its competitors.
PS: Do you think you have implemented a strategy that has fixed a conflict, and the fortunes for your company, and can be a role model for the Indian print industry?
Do share your insights on my email: noel@haymarketsac.com